What To Expect From Splunk Today

Splunk Inc
SPLK
. is scheduled to report earnings before Wednesday’s open. The stock hit a record high of $225.89/share in 2020 and is currently trading near $123/share. The stock is prone to big moves after reporting earnings and can easily gap up if the numbers are strong. Conversely, if the numbers disappoint, the stock can easily gap down. To help you prepare, here is what the Street is expecting:

Earnings Preview:

The company is expected to report a loss of ($0.70)/share on $491.34 million in revenue. Meanwhile, the so-called Whisper number is a loss of ($0.74)/share. The Whisper number is the Street’s unofficial view on earnings.

A Closer Look At The Fundamentals:

The company is still losing money which is not something most investors typically want to see. The company makes software that helps organizations search, analyze, monitor, and better understand its data. That is a wide lane and there is a lot of room for growth as data analytics is a fast growing part of the economy.

A Closer Look At The Technicals:

Technically, the stock enjoyed a huge move in 2020 but has been in a long multi-month downtrend and is trading near its 52-week low. The 50 day moving average (DMA) has been steady resistance (red line above) and is declining which is not ideal for the bulls. Eventually, this downtrend will end and a new uptrend will emerge but until the stock trades above its 50 DMA line, lower prices will likely follow.

Pay Attention To How The Stock Reacts To The News:

From where I sit, the most important trait I look for during earnings season is how the market and a specific company reacts to the news. Remember, always keep your losses small and never argue with the tape.